[GP]: Migration Bonus for Impacted ILM v1.0 Users

General
1

Summary

This proposal introduces a one-time migration bonus for users of ILM v1—specifically 1.5x and 3x ETH Long ILMs—who were adversely affected by the forced wind-down of the legacy leverage platform. The bonus aims to recognize users who suffered directional downside due to the deprecation and incentivize their continued participation in the Seamless Morpho vaults.

Background and Context

With the approval of GP-9, the Seamless DAO officially entered its “platformless” era—transitioning away from its legacy Aave-based architecture and moving toward building Vaults on Morpho. This shift enables Seamless contributors to focus on innovation and product development, most recently demonstrated by the launch of Leverage Tokens.

A key component of GP-9 was the structured sunsetting of the Legacy Platform, which began on March 28, 2025. As part of this process, Seamless ILM v1 strategies were also wound down. On April 11, leverage on all ILM vaults was set to zero, effectively unwinding any remaining active positions.

This process had minimal impact for most ILM users:

  • wstETH/ETH ILMs were delta-neutral and continued accumulating ETH.

  • cbBTC ILMs were largely flat or in profit.

  • ETH Short ILMs likely ended in the money due to the broader ETH downtrend.

However, the outcome was different for users in ETH Long ILMs (1.5x and 3x). These users may have been forced to close positions while at a net loss or were prevented from holding through a potential rebound.

GP-9 originally proposed the concept of a “Migration Bonus” for ILM v1.0 users:

“Since Leverage Tokens are not yet available but on the near-term horizon in the coming month or so, I suggest offering a migration bonus (potentially an airdrop) for loyal ILM v1.0 users who redeposit into Seamless Morpho Vaults until Leverage Tokens launch. The DAO can determine the details through discussion or a future vote.”

Given the above, this proposal aims to formally provide a Migration Bonus to affected ETH Long ILM v1 users, recognizing the opportunity cost incurred during the transition and encouraging continued engagement within the Seamless products ecosystem.

Proposal Details

Eligibility Criteria

To qualify for the migration bonus, users must meet all of the following conditions:

  1. Impacted ILM Participation
  • Held a position in either the 1.5x or 3x ETH Long ILM on the wind-down announcement date (March 28, 2025).
  1. Seamless Vaults on Morpho Participation
  • Deposited in any Seamless Vault on Morpho at the time of a snapshot (July 3, block block 32357648).
  1. Claim Submission
  • Submit a claim via a Google Form during the application window (1 month after this proposal is approved) .
  1. Wallet Identity Lock
  • The reward is only distributed to the same wallet that held the ILM position to prevent fraud or identity theft.

Reward Framework

  • Budget Cap: Up to $20,000 USD (in USDC), sourced from the Reserve Factor wallet.

  • Distribution Model:

    • Rewards are distributed pro-rata based on the TVL (Total Value Locked) of eligible ETH Long ILM positions at the time of wind-down.

    • If total eligible submissions are below the total eligible TVL/wallets, then the budget will scale proportionally and only the budget related to valid claim amounts will be distributed (i.e. less than $20k USD).

Application Process

  1. Seamless Core Contributors will launch an application collection once this proposal is approved by the DAO. An application form will be available for one month after the proposal is approved

  2. Submissions will be verified via on-chain data using Dune or similar tooling to prevent gamification and malicious activity.

  3. Rewards will be sent to the eligible original wallet addresses.

Next Steps

  1. DAO to discuss and approve this proposal via Snapshot.
  2. Seamless Core Contributors to launch an application process.
  3. DAO to vote on-chain to distribute a migration bonus to eligible wallerts.
2 Likes
2

Thanks for following up on this. If there are funds to tap within the Reserve Factor, this seems like a great initiative to help those impacted by ETHs sudden price decline earlier this year.

Perhaps there are dune queries to help assess eligibility, but regardless folks who were in the ETH Long ILMs should consider this program and Claim process.

3

I do really support a Migration bonus for those of us affected. I Lost a lot on the Timing of the Shutdown of the 3x Long (around 90%). The Shutdown was done at about the absolute low of Ethereum. I would have about 75% back if I would have been able to Stay in my position. I do have a Problem with the SNAPSHOT date. I migrated early then left in late June to deposit into the 17X loop but it kept failing. I was able to deposit again on July 6 but was not in during the Snapshot, so unless you can do another snapshot I would have to vote against the proposal

4

Am in favor of a proposal that keeps things simple and straight to the point while minimizing potential gamification/sybil attack vectors - okay with the proposal above!

5

@Cryptofried I hear your concerns, but as the GP-9 stated, the snapshot shall be taken by the team at a random moment. Im not sure it is a good option to change a date as this will highly increase a gamification aspect. Given that there are no other amendments, except for the snapshot date, I believe we can start a 2 days cool down period with the aim to proceed with voting on Monday

6

[GP-12] Migration Bonus for Impacted ILM v1.0 Users

Summary

This proposal introduces a one-time migration bonus for users of ILM v1—specifically 1.5x and 3x ETH Long ILMs—who were adversely affected by the forced wind-down of the legacy leverage platform. The bonus aims to recognize users who suffered directional downside due to the deprecation and incentivize their continued participation in the Seamless Morpho vaults.

Background and Context

With the approval of GP-9, the Seamless DAO officially entered its “platformless” era—transitioning away from its legacy Aave-based architecture and moving toward building Vaults on Morpho. This shift enables Seamless contributors to focus on innovation and product development, most recently demonstrated by the launch of Leverage Tokens.

A key component of GP-9 was the structured sunsetting of the Legacy Platform, which began on March 28, 2025. As part of this process, Seamless ILM v1 strategies were also wound down. On April 11, leverage on all ILM vaults was set to zero, effectively unwinding any remaining active positions.

This process had minimal impact for most ILM users:

  • wstETH/ETH ILMs were delta-neutral and continued accumulating ETH.

  • cbBTC ILMs were largely flat or in profit.

  • ETH Short ILMs likely ended in the money due to the broader ETH downtrend.

However, the outcome was different for users in ETH Long ILMs (1.5x and 3x). These users may have been forced to close positions while at a net loss or were prevented from holding through a potential rebound.

GP-9 originally proposed the concept of a “Migration Bonus” for ILM v1.0 users:

“Since Leverage Tokens are not yet available but on the near-term horizon in the coming month or so, I suggest offering a migration bonus (potentially an airdrop) for loyal ILM v1.0 users who redeposit into Seamless Morpho Vaults until Leverage Tokens launch. The DAO can determine the details through discussion or a future vote.”

Given the above, this proposal aims to formally provide a Migration Bonus to affected ETH Long ILM v1 users, recognizing the opportunity cost incurred during the transition and encouraging continued engagement within the Seamless products ecosystem.

Proposal Details

Eligibility Criteria

To qualify for the migration bonus, users must meet all of the following conditions:

  1. Impacted ILM Participation
  • Held a position in either the 1.5x or 3x ETH Long ILM on the wind-down announcement date (March 28, 2025).
  1. Seamless Vaults on Morpho Participation
  • Deposited in any Seamless Vault on Morpho at the time of a snapshot (July 3, block block 32357648).
  1. Claim Submission
  • Submit a claim via a Google Form during the application window (1 month after this proposal is approved) .
  1. Wallet Identity Lock
  • The reward is only distributed to the same wallet that held the ILM position to prevent fraud or identity theft.

Reward Framework

  • Budget Cap: Up to $20,000 USD (in USDC), sourced from the Reserve Factor wallet.

  • Distribution Model:

    • Rewards are distributed pro-rata based on the TVL (Total Value Locked) of eligible ETH Long ILM positions at the time of wind-down.

    • If total eligible submissions are below the total eligible TVL/wallets, then the budget will scale proportionally and only the budget related to valid claim amounts will be distributed (i.e. less than $20k USD).

Application Process

  1. Seamless Core Contributors will launch an application collection once this proposal is approved by the DAO. An application form will be available for one month after the proposal is approved

  2. Submissions will be verified via on-chain data using Dune or similar tooling to prevent gamification and malicious activity.

  3. Rewards will be sent to the eligible original wallet addresses.

Next Steps

  1. DAO to discuss and approve this proposal via Snapshot.
  2. Seamless Core Contributors to launch an application process.
  3. DAO to vote on-chain to distribute a migration bonus to eligible wallerts.